I procured my NIF in mid-2022, and applied for my GV in March 2023 (investment in a hotel project in a low-density area). The hotel will be operational sometime in 2026, and there will be rental income derived from this investment once the hotel is operational. I’m not resident in Portugal and neither do I have any income derived from any other investments in Portugal at the present time.
Is there any obligation to file a tax return in Portugal in the above case for the current and previous year?
If you are not a resident of Portugal (i.e. you do not reside there for more than 183 days), then no, you do not have to file PT income tax returns (per my lawyer and per my Portuguese tax accountant).
Declaration has to be made yes, but the tax slabs do vary a lot depending on the fiscal situation and number of people in a household and several other factors included. The tax assessment, has been made by 31 July for the previous year’s income. Tax must be paid by 31 August of the year in which you filed your tax return. For a correct advice it is better to work with a Licensed accountant to complete the formalities which costs no more than 100 Euros for a tax declaration for a household including IVA. You can stay away from Golden Visa accountants who charge a bomb to do a sub optimal job.
Guys, all I can say you gotta be careful with this.
It is a very common scenario where a non-resident owns a property in a country X, derives a rental income and therefore has to pay a local tax on that income in the country X. On top of that he/she would pay (or not) a tax on the same income in their country of tax residence.
E.g. I am intimately familiar with a country who issue two separate tax guides - one for tax residents and another for non-residents, with detailed instructions on which income is taxable locally in each case and how to declare/pay.
From what I know about PT I cannot imagine why they would be any different.
Ultimately it is up to you and your tax advisor to make decisions but as long as you are equipped with the right knowledge at least your decisions would be informed.
My apologies, I misread your OP and thought you already earn income in PT.
If there is no local income yet, and you are not a PT tax resident, there is no income to declare and no tax to pay.
Thanks @tommigun, yes the operative situation is “no income in PT and no time spent in PT”. Under normal circumstances I would always assume there is no need to file a TR, but just wanted to be sure whether a zero TR needs to be filed if I possess a NIF.
That is true, regardless of whether you are a resident or not. I was referring to the situation where you live elsewhere full time and just have your NIF in Portugal. In that case, you are not liable for any taxes if they are not derived or linked in any way to Portugal.
Just to add one little thing about " derived or linked".
If the income is not derived or originated from Portugal but the income is paid into the portuguese bank account, then there is still a link. The consequence of this is that you will still be taxed. Be careful!
It happened to me. Few months ago I received a letter from Portuguese tax authority informing that I did not declare income in 2020 (i was quite shock because I only started living and becoming tax resident in PT since 2022).
After months investigating with the lawyers about what exactly the tax authority wanted from me, it turned out that I had a small dividend from one of the stock in UK but the dividend was paid into the Millenium Bank account in 2020. Although the company itself was registered in UK, but money was sent to PT. Therefore, I had to pay dividend tax for PT which is 28%. I was testing my millenium bank account at that time and the amount is small. However, a lesson has been well learnt that in order to avoid from being taxed by PT, you need to cut off all possible links. It is just like a black venom - once it binds, it is really hard to unbind.
Did you eventually find out with your lawyers as to why AT challenged your 2020 ‘income’ while you were not even a tax resident in PT back then? Do they expect any new tax residents to backdate their global income remitted to PT and pay taxes since birth?
As I said, although I was not tax resident of PT in 2020 and UK dividend was originated from UK, but the money was paid into bank acount in Portugal. Therefore, for that certain income, I had to pay tax which was 28% of the dividend. I do not know what is going to happen to other people. But the letter was sent to my in 2024 about the tax situation in 2020. Therefore, people might receive letter in coming years (only God knows the exact year)… I am already thinking about cutting off all links with Portugal once the passport’s mission is done!!!
Only direct payments right? So if the money is paid directly to a Portuguese bank, there may be an issue (but maybe the double tax treaty provides relief? Eg you may at least get a credit for the PT tax against your other taxes)
But if the payment is direct to a bank outside PT, and you then manually transfer money to PT, there is no issue, right?
Although I am not the intended respondent, I have looked into this a bit further and it seems the issue may have arisen due to a direct payment of dividends into the PT bank account.
It appears the tax on dividends applies to both residents and non-residents alike at 28% according to some sources:
Sure this is normal, the distinction is in which dividends are subject to tax. For residents it will usually be all dividends. For non-residents, it would only be dividends sourced from the country in question. Dividends sourced from other countries would be taxed only for residents.
I am already thinking about cutting off all links with Portugal once the passport’s mission is done!!! 